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    TIGO
    Earnings call· Jun 2026(Q2 FY26)

    MILLICOM INTERNATIONAL CELLULAR SA Q2 FY26 earnings call TIGO

    Aug 6, 2026 Source

    Executive summary

    Millicom Q2 FY26 — Record Adjusted EBITDA and Equity Free Cash Flow, Raised Guidance

    Millicom delivered a strong second quarter, achieving record adjusted EBITDA and equity free cash flow, driven by robust organic service revenue growth and successful integration efforts. The company raised its full-year equity free cash flow guidance and improved its leverage target, reflecting confidence in its expanded portfolio and disciplined execution. Management emphasized value growth over volume, particularly through its pre-to-post strategy and fixed-mobile convergence.

    Highlights

    6

    • Service revenue reached $2 billion, growing 5% organically year-over-year, its strongest organic growth since 2021.

    • Record adjusted EBITDA of $1 billion, the first time Millicom has surpassed this milestone in a single quarter.

    • Record equity free cash flow of $327 million, an increase of more than 50% year-on-year.

    • Raised 2026 equity free cash flow guidance from at least $900 million to around $1.1 billion.

    • Improved year-end leverage target to below 2.5x, from 2.73x in Q2 FY26.

    • Board approved an additional interim dividend of $1.50 per share, payable in two installments in January and April 2027.

    Concerns

    4

    • Reported prepaid and home subscriber figures in Colombia include a normalization effect due to Coltel integration, not reflecting underlying business deterioration.

    • Chile remains a highly competitive market with aggressive pricing and elevated churn.

    • Ecuador's Adjusted EBITDA margin is expected to contract a few percentage points in H2 2026 due to Tigo brand launch and associated marketing investments.

    • Q2 equity free cash flow benefited from favorable expense timing and working capital movements, requiring caution for forecasting the remainder of the year.

    Guidance & targets

    6
    CategoryTargetConfidence
    Full-year 2026 Equity Free Cash Flow
    around $1.1 billion
    high materiality
    High
    Year-end Leverage Target
    below 2.5x
    high materiality
    High
    Additional Interim Dividend
    $1.50 per share
    medium materiality
    High
    Colombia Full-year EBITDA Margin
    roughly in line with FY '25
    medium materiality
    Medium
    Full-year CapEx over Revenues
    around 12%
    medium materiality
    Medium
    Ecuador Adjusted EBITDA Margin
    contract a few percentage points
    low materiality
    High

    Segment performance

    10
    SegmentRevenueYoYQoQMargin
    Group
    Strongest organic growth since 2021, record adjusted EBITDA. Reported service revenue growth of 60.1% year-on-year.
    Adjusted EBITDA: $1 billion
    		$2 billion5% organically—46.3% Adjusted EBITDA margin
    Mobile Business (Group)
    Driven by pre-to-post migration strategy and healthy ARPU trends.
    		$1.2 billion6.9% organically——
    Home Business (Group)
    Supported by disciplined pricing, high-value broadband, convergence, and FIFA World Cup content. 80% of growth from World Cup effect in Q2.
    		$513 million3% organically——
    B2B Segment (Group)
    Strong momentum, expanding beyond connectivity with higher-value digital services.
    Digital services revenue: $120 millionDigital services revenue growth: 14% year-over-yearSME segment revenue growth: 8% year-over-year
    		$401 million3.8% year-over-year——
    Colombia
    First full quarter reporting Coltel under full ownership; all three business lines contributed to growth. Cost-saving initiatives ahead of plan, including over $30 million severance payments in Q2.
    Adjusted EBITDA: $336 million
    		$816 million11% organically—39.4% Adjusted EBITDA margin
    Guatemala
    Outstanding quarter, strongest quarterly performance in 10 years, driven by prepaid to postpaid migration and pricing. EBITDA margin improved by almost 1 percentage point year-on-year.
    Adjusted EBITDA: $245 million
    		$382 million5.9% year-on-year—55.6% Adjusted EBITDA margin
    Panama
    Return to top-line growth after regulatory impact in Q1. Adjusted EBITDA broadly stable year-on-year.
    Adjusted EBITDA: $92 million
    		$175 million3.1% year-over-year—50.7% Adjusted EBITDA margin
    Paraguay
    Excellent quarter, record adjusted EBITDA margin, supported by postpaid customer base expansion and mobile ARPU increase. Margin expanded by 6.4 percentage points.
    Adjusted EBITDA: $100 million
    		$169 million3.4% year-on-year—56.9% Adjusted EBITDA margin
    Ecuador
    Stabilized business, reversed service revenue erosion, substantial progress in margin improvement (up 15.4 percentage points YoY on pro forma basis).
    Adjusted EBITDA: $58 million
    		$112 millionbroadly flat year-on-year—48.9% Adjusted EBITDA margin
    Other Markets (Nicaragua, El Salvador, Costa Rica, Bolivia, Uruguay)
    Demonstrated operational leverage, EBITDA grew faster than revenue (4.7% YoY).
    Adjusted EBITDA: $194 million
    		$398 million2.8% year-on-year—46.3% Adjusted EBITDA margin

    Operational metrics

    24
    Adjusted EBITDA
    $1 billion9.1% organic growth year-on-year
    Q2 FY26

    First time Millicom surpassed this milestone in a single quarter. Reported growth almost as fast as reported revenue growth despite acquired lower-margin businesses and restructuring charges.

    Postpaid Net Adds
    167,000sequentially
    Q2 FY26

    Demonstrates continued strength of commercial execution, particularly from the pre-to-post strategy.

    Postpaid Customer Base Growth
    more than 31%
    last year

    Supported by expanded perimeter and continued commercial execution. Approximately 2/3 of new postpaid sales come from prepaid migrations.

    Fixed Mobile Convergence (FMC) Penetration
    approaching 40%
    Q2 FY26

    Continued to gain traction, expands customer loyalty and lifetime value.

    Restructuring Charges (Group)
    $35 million
    Q2 FY26

    Incurred in Q2, associated with Colombian integration. Full year estimate provided in Q&A.

    Cash CapEx
    $274 millionup $72 million compared to prior year
    Q2 FY26

    Mainly reflects continued investment in recently acquired businesses and higher spending on leased mobile devices under Colombia's customer device leasing programs.

    Spectrum Payments
    $41 million
    Q2 FY26

    Mainly related to Colombia.

    Working Capital and Other Contribution to eFCF
    $47 millionimprovement of $70 million year-on-year
    Q2 FY26

    Benefiting from payment phasing and improved inventory management.

    Taxes Paid
    $40 millionincreased $40 million year-on-year
    Q2 FY26

    In line with increased contribution from acquired businesses.

    Finance Charges
    $131 millionincreasing $49 million year-on-year
    Q2 FY26

    Mainly as a result of additional financing associated with acquisitions.

    Lease Payments
    $161 millionincreased $79 million year-on-year
    Q2 FY26

    Primarily result of expansion in operating perimeter and the impact of Lati tower sale and leaseback transaction last year.

    Net Debt
    $8.1 billionincreased from $7.6 billion (start of Q2)
    Q2 FY26

    Increase predominantly related to appreciation of local currency denominated debt.

    Leverage (Net Debt to EBITDA)
    2.73xdeclined modestly from 2.76x (start of Q2)
    Q2 FY26

    Reduced by eFCF and EBITDA growth, largely offset by shareholder distributions and M&A-related payments.

    Shareholder Distributions (Total Dividends)
    $335 million
    Q2 FY26

    Extraordinary dividends related to last year's Lati tower transaction.

    M&A-related Payments
    $221 million
    Q2 FY26

    Mainly associated with the acquisition of the remaining Coltel stake previously held by La Nacion, which does not come with incremental consolidated EBITDA.

    Postpaid Customer Base Growth
    almost 20%
    year-over-year

    Combined with healthy ARPU, translated into mobile service revenue growth.

    New Postpaid Sales from Prepaid
    86%
    Q2 FY26

    Exceptional conversion rate, clear demonstration of commercial strategy.

    Postpaid Customer Growth
    7.1% organically
    year-over-year

    Nearly 2/3 of new postpaid sales coming from prepaid migrations.

    Home Customer Base Growth
    2.4% organically
    year-over-year

    Growth in the Home segment in Colombia.

    Fixed Mobile Penetration
    44%
    Q2 FY26

    Reinforcing customer value while creating additional opportunities for cross-selling.

    eFCF Margin Improvement
    10 percentage points
    year-over-year

    From 2% over revenues in prior quarter to 13% over revenues this quarter, due to efficiency focus.

    Postpaid Customer Base Expansion
    10%
    Q2 FY26

    Supported by low single-digit increase in mobile ARPU.

    Adjusted EBITDA Increase
    almost 40%
    year-on-year

    On a pro forma basis, representing substantial progress.

    Adjusted EBITDA Margin Improvement
    15.4 percentage points
    year-on-year

    Reached 48.9%.

    Industry KPIs

    5
    MetricValueDetails
    Postpaid arpa vs ARPUlow single-digit increase in mobile ARPU%
    Free cash flow FCF guidancearound $1.1 billionUSD
    Service revenue growth rate5.4%%
    Postpaid net account additions167,000customers
    Share buyback capital returned$335 millionUSD

    Deals & partnerships

    2
    La NacionAcquisition of remaining Coltel stake$221 million

    M&A-related payments mainly associated with this acquisition.

    LatiSale and leaseback transaction of towers

    Impacted lease payments year-on-year due to expansion in operating perimeter and the transaction itself.

    Risks & headwinds

    5
    Reported prepaid and home subscriber figures in Colombia include a normalization effectQ2 FY26

    Not a deterioration in underlying business

    Mitigation: Accounting and reporting alignment completed; subscriber trends expected to normalize and growth rates to return to more typical levels over coming quarters.

    Chile continues to be a highly competitive market with aggressive pricing and elevated churnOngoing

    Highly competitive market

    Mitigation: Applying Millicom playbook focused on efficiencies and simplification; seeing positive signs from industry on pricing movements.

    Ecuador Adjusted EBITDA margin expected to contract due to Tigo brand launchremainder of 2026 (H2)

    a few percentage points

    Mitigation: Planned incremental marketing and promotional investments for brand launch.

    Currency appreciation (Guarani vs. USD) impacting costs in ParaguayQ2 FY26

    Lower cost in dollars for dollar-denominated content rights

    Mitigation: Localized P&L, hedging debt with local currency debt, but still subject to currency movements.

    Q2 equity free cash flow benefited from favorable expense timing and working capital movementsQ2 FY26

    $327 million (record)

    Mitigation: Caution advised for forecasting remainder of the year; expect lower Q3 and strong Q4.

    What to watch in Q3 FY26

    5

    Colombia Subscriber Trends

    coming quarters
    CurrentReported prepaid and home subscriber figures include a normalization effect
    TargetSubscriber trends to normalize and growth rates to return to more typical levels

    Why it matters

    Verifies the underlying health of the Colombian business post-integration and accounting alignment.

    With this work now substantially behind us, we expect subscriber trends to normalize and growth rates to return to more typical levels over the coming quarters.

    Q&A highlights

    6

    How should investors look at the phasing of cash flow given a strong Q2, especially since Q4/Q1 are typically strong?

    Q2 was an absolute record for eFCF, so caution is advised for Q3 and Q4. The phasing will likely resemble the first half, with a lower Q3 and a strong Q4.

    “Our Q2 is an absolute record equity free cash flow for the company. So that's why I wanted to be a bit cautious on just to keep with another 2 quarters in Q3 and Q4. I think it will look a little bit like the first half of the year. I think that's a fair way to look at it. for the rest of the year. So a lower Q3 and then a strong Q4 during the year.”

    asked by Andreas Joelsson · answered by Bart Vanhaeren

    2 min read7 chapters

    Detailed Narrative

    01

    Strong Q2 Performance & Strategic Execution

    Millicom achieved its strongest organic service revenue growth since 2021, reaching $2 billion, and recorded its first-ever $1 billion adjusted EBITDA quarter. This performance was attributed to disciplined execution of its 'more for more' strategy, pre-to-post migration, and efficiency improvements, demonstrating the strength of its operating model even while integrating new businesses and absorbing restructuring costs.

    02

    Colombia Integration & Subscriber Harmonization

    The integration of Coltel in Colombia is progressing well, with subscriber reporting standards harmonized, leading to a normalization effect on reported prepaid and home subscriber figures. Management emphasized that this is an accounting alignment, not a deterioration, and underlying commercial momentum remains healthy, with postpaid net adds increasing by 167,000 sequentially (excluding M&A).

    03

    Mobile Business Growth Drivers

    The mobile strategy, built on disciplined prepaid base management and targeted pre-to-post migration, continues to deliver strong results. The postpaid customer base grew over 31% year-over-year, with approximately two-thirds of new postpaid sales coming from prepaid migrations. This strategy, now applied across a larger customer base, drove mobile service revenue growth of 6.9% organically to $1.2 billion.

    04

    Home Business Turnaround

    The Home segment showed continued improvement with a more rational competitive environment, focusing on network quality and higher broadband speeds. Despite subscriber harmonization, service revenue grew 3% organically to $513 million, supported by disciplined pricing, high-value broadband offers, and increasing fixed-mobile convergence (FMC penetration approaching 40%). The FIFA World Cup content also provided a significant revenue boost.

    05

    B2B Segment Expansion

    The B2B segment maintained strong momentum, with digital services revenue increasing 14% year-over-year to $120 million, reflecting demand for cloud, cybersecurity, and managed services. Overall B2B service revenue grew 3.8% to $401 million, driven by strong performance across SME, Corporate, and Government segments, strengthening the quality of the B2B revenue base beyond basic connectivity.

    06

    Guatemala & Chile Market Dynamics

    Guatemala delivered an outstanding quarter, with mobile service revenue growing 6.4% to $295 million, driven by a high prepaid-to-postpaid conversion rate (86% of new postpaid sales). In Chile, the company is applying its playbook, focusing on efficiencies, which has already improved adjusted EBITDA sustainability and eFCF margin by 10 percentage points year-over-year, despite a highly competitive market.

    07

    Capital Allocation & Shareholder Returns

    The company's strong performance led to a raised 2026 equity free cash flow guidance to around $1.1 billion and an improved year-end leverage target to below 2.5x. The Board approved an additional interim dividend of $1.50 per share, payable in two installments in January and April 2027, consistent with a policy of distributing approximately two-thirds of equity free cash flow.

    AI-generated summary of the company’s earnings call. Not investment advice.